House of Commons Hansard Debates for 16 Jul 1990

Mr. Lilley : As I understand it, such a person would be included in the new clause. "Theatrical" has a wider use than activities in the theatre. Many hon. Members are theatrical from time to time, and the definition is quite wide. I am assured that there is no difficulty in this respect. Those in the industry with whom we have discussed the matter are content with our definition. If we discover that it does not work properly, my successor will consider it in that light. My hon. Friend the Member for Arundel (Sir M. Marshall) mentioned the timing of tax relief. I assure him that we shall, as promised in the press release, continue our discussions to find out whether it is possible to give relief on the same basis as relief for pension contributions. I recognise that the profession would welcome that. It would be sensible if I were to return to the fundamental issues that have been raised in the debate. I have discovered that the hon. Member for Newham, North-West (Mr. Banks) is 137 days older than me--

Mr. Tony Banks : If you don't mind!

Mr. Lilley : We are both well preserved, despite our great age. The hon. Gentleman asked why the status of actors was changed. There are two reasons. First, a decision in law was made. Secondly, the interpretation of the law that was more generally available to the Inland Revenue required the Revenue to make that change. The decision was not made by whim or fancy of Ministers or the Revenue. It was made in response to an interpretation of the law laid down by the House.

The hon. Member for Stoke-on-Trent, Central (Mr. Fisher) argued that the case that triggered the decision was old and atypical. The matter is up to Equity. One reason for the long delay in implementing the change was that we were waiting to see whether Equity would challenge the decision and appeal. It did not do so.

Mr. Fisher : Eighteen years have passed.

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Mr. Lilley : If the hon. Gentlemen cares to look at the chronology of events that I related in Committee--I shall not bore the House by repeating it--he will see that the cases were spread out and he will note that Equity had several opportunities to appeal but did not. I believe that Equity is now considering an appeal. I have already given an assurance that the Revenue will co-operate with Equity in developing test cases which will provide appropriate coverage. I admit that I am not wedded to a particular legal ruling reached by courts in the past. If they reach one that is more satisfactory to the House, so be it ; but let us go through the correct legal procedures.

My hon. Friend the Member for Warrington, South (Mr. Butler) suggested that there was a Revenue campaign to winnow out the self-employed. I assure him that there is no such campaign. The Revenue is under an obligation to implement the laws passed by the House, according to advice by its legal advisers or according to how the courts interpret the law and require it to act. In this respect, the Revenue has a certain amount of discretion in terms of the transitional arrangements which it may in certain circumstances, under its care and management powers, deploy in introducing a changed legal interpretation.

5.15 pm

As the hon. Member for Stoke-on-Trent, Central pointed out, the changes have taken a long time. The Inland Revenue has not been precipitate in implementing this decision. I should have thought that, in its generous concession to established artists, it has used its discretion to the full. In effect, it has said that, although the law says that all actors on such a contract are employed--not self-employed--those who, over the past three or more years, have been treated as self-employed may retain that status not just for one or two years but for the rest of their working lives.

The generosity of this concession to established members of the artistic and acting professions has created the disparity between them and newcomers about which hon. Members have been rightly concerned, and we have tried to allay those fears a little with the new clause. We have a problem because of the Revenue's generosity, not its meanness, and because a protracted period has passed, not because the Revenue has acted precipitately. I hope that hon. Members will not blame the Revenue for the consequences of laws that we in our wisdom, or lack of it, choose to pass. If we do not like the consequences of those laws, it is up to us to change them, and not to rely on civil servants to use a discretion which, rightly, they have not been given.

The hon. Member for Islington, South and Finsbury said that the key to achieving more generous treatment of new actors lies in the "necessarily" condition on the treatment of expenses. I understand that the issue concerns not just the "necessarily" condition but, as I said in Committee, the phrase

"in the performance of those duties"

which rules out many expenses which are allowable against income under schedule E. Auditions, which were mentioned by the hon. Member for Makerfield (Mr. McCartney), and several other items which were mentioned by the hon. Member for Stoke-upon-Trent, Central are not expenses incurred

"in the performance of those duties"

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as the law has established the meaning of those words. So long as we leave that test in the legislation, we will not be able to render those costs deductible.

Mr. Fisher rose --

Mr. Lilley : I suspect that the hon. Gentleman is going to say that we should replace that phrase with wording that would allow those costs to be deductible. I have been persuaded that that would not be appropriate because it would be impossible to ring-fence it to actors. It would be difficult to do so initially in law, but I am certain that, if it could be done just in the first drafting of the law, countless other professions that incur similar expenses and want similar treatment would, before long, be knocking at our door, and we would find it difficult to resist them. In a new clause tabled in Committee, the Opposition began that process of erosion by joining journalism to the entertainment profession so that journalists could receive the benefits of such an extension.

Mr. Fisher : Will the right hon. Gentleman explain why agents' fees are incurred

"in the performance of those duties"

rather than "in the pursuit of work"? I think that he would agree that the other expenses which my hon. Friends and I itemised are definitely expenses incurred "in the pursuit of work" because unavoidable expenses are incurred. As I understand it, the right hon. Gentleman is making a distinction between "in the pursuit of work" and

"in the performance of those duties".

I am not sure that he can justify that in terms of his concession on agents' fees. Will he be a little more sympathetic and look at the possibility of issuing guidelines to the Inland Revenue? If he said that those guidelines should take into account the other expenses in pursuit of work which are unavoidably incurred, he would satisfy all hon. Members.

Mr. Lilley : I was not arguing that agents' fees meet the present terms and conditions under schedule E. On the contrary, they do not. We introduced the new clause to override the normal expenses rule in the case of agents' fees. We are doing that because it is capable of being ring- fenced. All other professions, apart from entertainment, are forbidden by employment law to charge an employee for the fees of an agent in obtaining employment--they have to charge the employer. Therefore, there are no other people in a similar position waiting to knock at my door, my successor's door or even the door of the hon. Member for Stoke-on-Trent, Central. I assure the hon. Gentleman that, if we did as he suggested, we would open a Pandora's box of demands to widen relief on all expenses. We would find it costly, not especially in the case of actors, as we are not arguing about the cost of relief to actors, but, once one has started on that slippery slope, one would have to extend the provision further and further before very long, as the new clause introduced by the Opposition in Committee illustrated.

Mr. Tony Banks : That is an argument that one often hears when a case is being put forward. People say, "If we do it for this group, we will have to do it for every other group." That does not necessarily follow. Given that the Inland Revenue is allowed to exercise discretion when considering individual cases or groups of workers, why should it not consider the cases of other groups of workers who might come forward? If they have a good enough case

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the relief could be extended to them as well. If one concedes that a case is good when it is made well by one group of workers, it does not follow that a Pandora's box is opening up or that we are on a slippery slope.

Mr. Lilley : The hon. Gentleman underestimates the political pressures that erupt when one creates a precedent. As I have already mentioned, before we have even given a concession to actors, journalists are being linked with them and piggy-backed on to the concession. It would be damaging to determine people's tax status, not by the terms and conditions of their engagement, but by the profession to which they belong. If we try to decide profession by profession whether people are self- employed or employed, we shall rapidly find that we are determining people's tax status by the political lobbying power of their profession, rather than for objective reasons. That would be a dangerous step to take.

Mr. Chris Smith : In general terms, the principle that the Financial Secretary has just adumbrated is entirely correct. However, taxation law and taxation administration single out a number of professions--North sea divers are an obvious case ; postmasters and certain peripatetic doctors are others--whose nature makes them a special case. To a certain extent, the new clause renders actors a special case. So the Minister cannot argue against the existence of special cases. Obviously, we have to be careful about who is judged to be a special case, but it is appropriate to regard some professions as a special case.

Mr. Lilley : That intervention perfectly illustrates the point that I was trying to make. Only one profession is treated analogously with what some hon. Members are now seeking--definition by law as schedule D--and that is deep divers. That resulted from an anomalous change made in 1978 by the last Labour Government for somewhat obscure reasons, which seemed to have something to do with the strategic importance of the developing North sea oil industry at that time and with the considerable sympathy that the profession evoked because of the high mortality rate suffered by divers. It did not have anything to do with the cost of getting to the place of work, which was one of the issues that we discussed in Committee--even though North sea divers face considerable costs in getting to the sea bed. However, as that is now being used as an argument for actors, and as the actors' profession numbers about 40,000, once it is defined in law that they are entitled to schedule D treatment whether the nature of their engagement is self-employed or not, it will be a much greater precedent for others to demand similar treatment.

In Committee, I listed the different groups and professions that had approached me and the Treasury relatively recently to demand some sort of concessionary treatment on schedule D. It was a long list. They are already asking for such treatment and having to be fended off. Once 40,000 actors were allowed schedule D treatment by law, year by year we would have to add to the list and before long we would find that anyone who wanted to be on schedule D and could get powerful support in the House would do so. That would erode the tax base considerably and tax rates would have to go up to compensate and we should all be back where we started. That is not a path that I can advise the House to take, any more than I advised the Committee to take it.

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The Committee largely accepted that we should try to seek a concession which could be extraneously ring-fenced and which would benefit actors, as it affects a considerable proportion of their income. There was agreement that agents' fees are the largest single item that most actors have to pay as a cost, and that they would welcome some tax relief on such fees. Although the clause does not achieve the perfect state that many hon. Members would like, it was right to go that far and no further. Therefore, I commend the clause to the House.

The hon. Member for Stoke-on-Trent, Central mentioned the stance of my right hon. Friend the Minister for the Arts. My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) rightly illustrated that taxation and the arts are essentially different responsibilities. He is participating in this debate and made a notable contribution in Committee because of his knowledge and expertise in the arts, happily reinforced by family involvement in the arts and a professional knowledge of taxation.

Mr. Fisher : A beautiful baby.

Mr. Lilley : So he told us. I can assure the hon. Gentleman that my right hon. Friend, in discussion with the Government, as everyone would expect, made the position of artists and the views of entertainers and others involved in the profession known to me. He explained their circumstances to me and therefore fulfilled his responsibilities to the arts, in the excellent way in which he always fulfils them, while ultimately leaving the decision about taxation to me and to Treasury Ministers, once we were fully informed of the needs and circumstances of those in the entertainment profession. It is utterly wrong to criticise my right hon. Friend in the way that the hon. Member for Stoke-on-Trent, Central did.

I commend the new clause to the House and I hope that the amendments will be deemed unnecessary by the Opposition.

Mr. Chris Smith rose--

Mr. Deputy Speaker : Does the hon. Gentleman have the leave of the House to speak again?

Hon. Members : Yes.

Mr. Smith : I simply wish to pick up the last point that the right hon. Gentleman made. We entirely accept the assurances that he has given us on amendments (a) and (b), but we remain a little concerned about amendment (c)--the definition of theatrical artists. However, we accept the Government's assurances that they have acted in good faith. We will wish to study carefully the way in which the Inland Revenue interprets the clause.

Mr. Fisher : May I take the opportunity to respond to the Minister and to the hon. Member for Richmond and Barnes (Mr. Hanley)? I entirely accept that the Minister for the Arts made positive and full representations to the Financial Secretary--as he then was--as the House would expect. I also accept the point made by the hon. Member for Richmond and Barnes that no hon. Member would expect the Minister to speak against Government policy--that would be one Minister speaking against another. I was trying to make a wider point. While not contradicting the point that the Secretary of State was making about tax, I believe that the Minister for the Arts could have made a positive statement at some stage about the poor treatment

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of actors and the substantial case for their protection. That would not have gone against the Treasury's position, or breached ministerial guidelines. I accept the points that the Secretary of State made about representations, although I believe that the Minister for the Arts could have found some time to make a general statement in support of the acting profession.

Mr. Smith : My hon. Friend has made an extremely apt and helpful intervention.

I shall not seek, on behalf of the Opposition, to press our amendments to the vote. We wish new clause 7 all speed on to the statute book. However, we remain a little sad that the Government did not take the opportunity to go further, and to give a better deal to members of the acting profession.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 1

Environmental Assessment

1. Not later than 14 days after the date on which any Finance Bill is read for the first time in the House of Commons, the Chancellor of the Exchequer shall lay an Environmental Assessment before the House of Commons stating the anticipated environmental effects (if any) of each clause of the Bill.

2. For the purpose of this section the anticipated environmental effects of a provision shall be taken to include its anticipated effects on

(a) land use in the United Kingdom.

(b) the levels of pollution of the atmosphere, any body of water, or land, whether in the United Kingdom or elsewhere, as a result of agricultural or industrial activity

(d) the rate and types of energy production and use in the United Kingdom,

(e) encouraging the use of renewable sources of energy or raw materials in the United Kingdom, or

(f) human and animal health (whether in the United Kingdom or elsewhere)

as well as such other matters as the Chancellor considers to be relevant.

3. This section shall have effect in relation to any Finance Bill read for the first time on or after 1st January 1991.'.-- [Mr. Chris Smith.]

Brought up, and read the First time.

Mr. Chris Smith : I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker : With this, it will be convenient to consider new clause 4 : Catalytic converters --

1. After paragraph 5 of Schedule 6 to the Taxes Act 1988 there shall be added the following new paragraph :

"Cars with catalytic converters

6.--(1) Where a car is made available to an employee for part only of the relevant year, the cash equivalent derived from Table A, B or C after any reduction or increase provided for by paragraphs (2) to (5) above shall be reduced by 10 per cent if the car has been fitted throughout that part of the year with an exhaust emission reduction device, or by 5 per cent if the car has been fitted with such a device for more than one half of, but not for the whole of, that part of the year.

(2) Where a car is made available to an employee for the whole of the relevant year, the cash equivalent arrived at

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above (that is to say, after any reduction or increase provided for by paragraphs (2) to (5) above) shall be reduced by 10 per cent if the car was fitted with an exhaust emission reduction device at the end of that year and for the greater part of that year, or by 5 per cent if the car was fitted with such a device at the end to that year but not for the greater part of that year.

(3) For the purposes of this schedule an "exhaust emission device" means

(i) a catalytic converter or

(ii) any other device of a similar nature which the Treasury may from time to time prescribe".

2. This section shall have effect for the year of assessment 1990-91 and later years of assessment.'.

5.30 pm

Mr. Smith : New clause 1 seeks to place a duty on the Chancellor of the Exchequer each year when publishing the Finance Bill to publish also an environmental assessment of the impact that its provisions will have on our environment.

We hear much these days about how green the present Government seek to appear. The Prime Minister has now made five major speeches on environmental issues. Much to the astonishment of the environmental world, she has been awarded a good conduct prize for her actions in relation to the environment. However, when we look at what the Government actually do rather than what they say, we see that their record on the environment does not, I fear, bear much examination. The contrast with what is happening elsewhere in the world could hardly be greater. Many of the countries of the developed world are now realising the importance of environmental issues and the fact that, as a planet, we need to cope with the consequences of the industrial and economic policies that we pursue. That realisation is finding its expression not only in statements from Governments around the world, but also in their actions. At the end of June, when President Bush launched "Enterprise for the Americas", which is a new partnership for trade, investment and growth, he said :

"One measure of prosperity--and the most important long-term investment any nation can make--is environmental well-being. As part of our Enterprise for the Americas Initiative, we will take action to strengthen environmental policies in the hemisphere."

He then laid out a detailed agenda for action on, for example, debt for nature swaps for the countries of Latin America. We pressed that issue on the Government in Committee. President Bush also referred to a whole range of trading issues and to the impact that trading patterns can have on the environment of the developing world. If we consider environmental taxation policy and what is happening elsewhere in Europe, we discover that, in Italy in 1989, a special tax was imposed on non-biodegradable plastic bags, which was to be paid by manufacturers and importers. At 100 lira per bag, the tax is five times more than the cost of manufacturing the receptacle. In Norway, a charge has been imposed on non-returnable beverage and food containers since 1987. In Sweden, there is a high charge on batteries containing mercury or cadmium, amounting to 3.22 ecu per kilogramme of batteries sold. In Germany and the Netherlands, cars are divided into three categories, according to their air pollution characteristics. The cleaner the car, the higher the tax advantage for the car purchaser.

Many other examples could be given. It is clear that Governments elsewhere- -Governments everywhere--and of all political complexions, are waking up to the need to

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ensure that environmental considerations are taken into account in their economic policies, and especially their taxation policies. Here in Britain, before the Chancellor's Budget, the Labour party proposed a series of proposals for green taxes which the Chancellor could have adopted as part of this year's Budget. We were told in advance that it was likely to be a Budget for savings and, to a limited extent--in fact, it was to a very limited extent--a Budget for the environment. Well, it was not. The Chancellor announced only two minor measures to benefit the environment. The first was a minor adjustment to the differential between leaded and unleaded petrol, making a further difference of less than 1p. The second item was a small increase in the tax to be paid for having the benefit of a company car. Subsequently, it must be admitted that in Committee the Government came forward with a further measure on mileage allowances.

However, there have been no other proposals, in the Budget, in the Finance Bill, or in the 30 or 40 pages that the Government added to the Finance Bill in Committee, which could be said to have any environmentally beneficial effect in terms of adjustments to the taxation system.

In contrast, the proposals put forward by the Opposition before the Budget would have provided a ready agenda that would have enabled the Government to take positive steps in the right direction. We proposed, for example, that we should consider reducing or even altogether removing VAT on particularly environmentally friendly products or processes, such as recycled materials or energy-efficient appliances.

Mr. Campbell-Savours : Does my hon. Friend agree that another advantage of that approach to securing higher environmental standards is that producers are given a choice? A producer can decide to produce a product that he can produce more cheaply, but on which he pays a higher level of tax, or he can produce another product on which he might pay a lower level of tax. Does my hon. Friend agree that that approach will, through taxation, build into the mind of every industrialist the consideration that, if he wishes to reduce his tax liability, he must ever be seeking new technological processes that secure higher environmental standards?

Mr. Smith : My hon. Friend is absolutely right. Using the taxation system to promote good environmental behaviour offers not only the producer but the consumer a choice. That means that producers will be encouraged-- there will be an incentive--to look for alternative products that are less damaging to the environment.

As well as some carrots in terms of reductions in VAT, we also proposed some sticks with increases in VAT on, for example, items of non- biodegradable or non-recyclable packaging or on products with an excessive or unnecessary amount of packaging. We also proposed to increase VAT on CFCs, although, of course, we should like CFCs rapidly to be prohibited altogether. We proposed a review of corporation tax allowances, with additional allowances for anti-pollution or conservation investment, together with a provision to make non-allowable expenditure on items that create pollution. Therefore, if a company used or created pollutants such as CFCs, it would not be able to offset their costs against corporation tax. We suggested that, instead of levying vehicle excise duty at a flat rate regardless of engine capacity, it should be

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graded so that owners of small cars would pay less duty and owners of larger cars would incur more duty than at present. We proposed also a substantial additional difference between the price of leaded and unleaded petrol. The tax incentive to use unleaded since 1988 has been a success story, because its use has increased from single percentage figures to more than 30 per cent. of all petrol sold in this country. As my hon. Friend the Member for Workington (Mr. Campbell- Savours) said, that clearly shows that using the tax system to alter environmental behaviour can be most successful. However, its effect on unleaded petrol usage appears to have reached a plateau, so we suggested a further boost to try to ensure that the graph continues to climb.

We suggested also incentives for the fitting of catalytic converters, including zero rating for the purposes of VAT and a concession on the level of car tax where a converter is fitted to a new car. New clause 4, which is linked with new clause 1 for the purposes of this debate, advances a further measure to encourage the use of catalytic converters, in the form of an incentive to the users of company cars to persuade their employers to ensure that their cars are fitted with catalytic converters, by setting the tax levied on the user at a lower level.

Mr. William O'Brien (Normanton) : I recently asked the Secretary of State for Transport when it will be compulsory to fit catalytic converters to new cars. I am advised that, because of EEC legislation, the Government do not intend to make the fitting of converters compulsory until 1993. Would it not be in everyone's interest for the Government to speed up the legislation and to make the fitting of converters compulsory, rather than leave that to market forces?

Mr. Smith : My hon. Friend rightly identifies the problem of the three-year time scale before the fitting of catalytic converters is made mandatory. Converters are extremely helpful in removing or reducing exhaust emissions of carbon monoxide, nitrogen dioxide and hydrocarbons. They do not tackle the carbon dioxide problem, but are valuable in a number of other respects. The tax incentives proposed in new clause 4 will ensure much more widespread fitting of catalytic converters over the next two or three years--even before the mandatory provision comes into effect.

5.45 pm

We also proposed before the Budget a series of measures relating to company car taxation, to encourage the Government to raise the scale rates at which benefit is assessed, in line with the principles set by the former Chancellor of the Exchequer in his 1988 Budget, when he pointed out that taxation on the benefit of a company car was substantially less than the value of the benefit received. In both his 1988 and 1989 Budgets, the former Chancellor began the process of raising that rate, but the progress that he made has not been advanced to the degree that it should by the present Chancellor in this year's Budget and Finance Bill.

Those specific proposals for improvements to the tax system would have shifted environmental behaviour in a responsible direction, but none of them was taken to heart by the Chancellor or the Government. New clause 1 seeks to highlight the paucity of the Government's action in relation to the environment in this year's Finance Bill. It

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suggests that, when the Government decide upon taxation changes each year, they ought to report to the House what will be the environmental impact of those changes.

That duty would exist whether or not the Government actually did anything in environmental terms, and it would provide a powerful incentive for the Chancellor to sit down and think carefully when drawing up his Budget--in respect of not only the fiscal stance that he intended to take or the amount that he wanted to raise, but the environmental consequences of his actions. The requirement placed on him to think through the environmental issues would be a powerful tool in the hands of those of us who are concerned about our environment.

Mr. Jim Cousins (Newcastle upon Tyne, Central) : Is my hon. Friend aware that the Confederation of British Industry has produced a helpful information booklet for its members on how to conduct environmental audits, not only for the purposes of company accounts but for presenting information about company activities more usefully and constructively? Is that not a good example of the leadership that should come from the Government rather than from the CBI?

Mr. Smith : I am always delighted to hear that leadership is coming from the CBI. Not only in respect of the environment but in relation to interest rates, levels of investment and other issues, the CBI is increasingly demonstrating the kind of leadership that the Government are lacking. We suggest that the Government should be required to undertake an environmental audit each year in relation to their Budget and Finance Bill proposals.

Mr. Nigel Forman (Carshalton and Wallington) : Can the hon. Gentleman say who would advise the Chancellor of the Exchequer each year on the technical aspects of any environmental assessment in respect of any individual clause in the Finance Bill?

Mr. Smith : I do not see any problem in the Chancellor, together with his advisers, sitting down to make a presentation of a sensibly argued case about the likely environmental consequences of particular measures. Doubtless he would also call upon the assistance of his right hon. Friend the Secretary of State for the Environment and his advisers. In order to be helpful in this matter, we have set out in the new clause a series of items that could be looked at each year by the Chancellor in relation to particular items of taxation. At present, each year the Chancellor presents us with a Red Book in which he must set out the financial consequences of each of the measures he proposes and their cost. Why is it such an outrageous idea that the Chancellor should present us with a green book as well that sets out the consequences for our planet of his proposals? It is too often forgotten by politicians that the environment does not simply refer to specially labelled separate issues that stand apart from the so- called main stream of politics. The environment and environmental concerns should run through all Government policy and everything that the Government are about. Nowhere is that more true than in relation to the economy and taxation. The interaction between the economy and the environment will grow rather than diminish in importance.

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We believe that our new clause offers a way in which to highlight those issues to ensure that that interaction is properly scrutinised.

Taxation measures that change environmental behaviour through financial incentive are no substitute for the range of statutory and administrative measures that are also needed to protect our environment. Ultimately, it is regulation on polluting activity, integrated transport policies and energy conservation measures that will secure improvements in our environment in which we can all share.

However, taxation has its part to play as it can help to make a start to change behaviour. That is why we made a series of proposals before the Budget. That is why we urge on the Government a proper mix of financial incentives and regulation in relation to the environment. That is why we urge the Government to act in an environmentally responsible manner--they should settle their taxation policies so that people also act in that manner. Our new clause goes a considerable way to start that process, and it will ensure that, in future, the Chancellor will take more notice of the environment than, sadly, he has this year.

Mr. Gow : I enjoyed the speech of the hon. Member for Islington, South and Finsbury (Mr. Smith) and I understand and respect the motives that prompted him to table his new clause. Certainly the six signatories to the new clause are among the most agreeable Members of the House. It is possible, however, even for agreeable people to be mistaken. I do not know which among that sextet will claim to be the draftsman of the new clause, because the drafting is strange indeed. Subsection 2(b) refers to "any body of water", which is a breathtaking description of the water around us. Who could have dreamt up such a phrase? There are six paragraphs to that subsection, four apply to the United Kingdom only and two apply worldwide. Who was the environmental genius who managed to distinguish between those paragraphs that apply to all mankind and those that should apply to the United Kingdom only?

The hon. Member for Islington, South and Finsbury proposed some further discriminatory taxation designed to protect the environment, but I wonder whether the hon. Gentleman is able to assure the House that all his proposals are such that they would not require the consent of folk in Brussels who were described in such picturesque and in some ways extremely attractive language by my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley)? I fear that my right hon. Friend's Budget proposals are now constrained more and more by the need to obtain permission from unelected and unaccountable Commissioners in Brussels. I shall give way to the hon. Gentleman if he can give us an assurance that none of his proposals requires the consent of the folk in Brussels.

Mr. Chris Smith : Of course a number of the VAT proposals require consent across the European Community--not necessarily the consent of the bureaucrats in Brussels, but the consent of the member state Governments. However, the action on catalytic converters could be taken tomorrow, as I understand that agreement already exists on that. One or two of the VAT items would require the consent of the other member states, but some of the other EC countries have already taken steps in that direction.

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Mr. Gow : The hon. Gentleman confirms my worst fears : increasingly the taxation proposals that affect the British people require the consent and approval not only of Parliament, but of unelected, unaccountable folk in Brussels.

My hon. Friend the Member for Carshalton and Wallington (Mr. Forman), formerly Parliamentary Private Secretary to the former Chancellor of the Exchequer, asked who would fashion the environmental assessment, given that that assessment must be presented to the House by the Chancellor. Mercifully, my hon. Friend the Economic Secretary to the Treasury, himself an expert in all matters environmental, is to reply to this debate.

Let us go through the Treasury Ministers to find to which of them will be assigned the task of preparing the environmental assessment. Let us first consider my right hon. Friend the Chancellor of the Exchequer. We cannot heap further burdens upon him because he will be too busy in the coming weeks and months having discussions with German Ministers who have studied with close interest the article in The Spectator.

We then come to my right hon. Friend the Chief Secretary to the Treasury. We are told that in the coming weeks he will be engaged in the important matter--certainly I hope that he will be so engaged--of trying to restrain some of my right hon., and even hon., Friends, presently Ministers in the Administration, from spending more money than they should. Happily I note that my hon. Friend the Minister of State for Defence Procurement has hastened into the Chamber for this debate. He takes a keen interest in environmental matters and he alone of all Ministers will be assisting my right hon. Friend the Chief Secretary. He will do his duty by seeking to diminish spending while some of my other right hon. Friends will be seeking to increase it. We cannot heap an extra burden upon my right hon. Friend the Chief Secretary, especially in the coming important months before the spending plans for 1991-92 are fashioned.

We have excluded the Chancellor and the Chief Secretary. Who is the next on the list? My right hon. and noble Friend the Paymaster General who, it may be said, as an hereditary earl, is well qualified to prepare the economic assessment. But he also has other duties. He has to try to placate noble Lords in another place--

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